New TV arrangement at forefront of Cubs' business decisions

Telecasting nonstop programming from Kyle Schwarber's tape-measure home run to Ron Santo clicking his heels after victories is a vision that runs deep in the minds of Cubs executives.

"We look forward to the day we have the rights to start our own channel," Chairman Tom Ricketts said recently at the Cubs Convention.

But as profitably tempting as operating their own regional sports channel may be — as the Yankees can attest through the YES Network — there are many variables that have the Cubs keeping an open mind for 2020 when they can control television rights for their games.

"We're studying it to death to look at pros and cons and weigh the risks of launching on our own or launching with a partner," Crane Kenney, the Cubs' business president, said.

The Cubs have little doubt their next television contract will change the landscape, or become a ''paradigm shift," as Theo Epstein, the Cubs' baseball president, described it 2014.

The structuring of contracts for free agents Jason Heyward and Ben Zobrist suggests the Cubs will have deeper financial pockets in 2019 and beyond, which also will allow them to retain talents such as Kris Bryant, Kyle Schwarber and Addison Russell in their arbitration years.

Without a 20-year, $1.5 billion contract with FoxArizona, the Diamondbacks wouldn't have been able to sign marquee free-agent pitcher Zack Greinke to a record-setting six-year, $206.5 million contract in December to become a dark horse in the National League West.

And the Angels, with the backing of a 20-year, $3 billion local TV deal, were able to sign slugger Albert Pujols and left-hander C.J. Wilson to back-loaded contracts totaling $331.5 million.

"The money is still out there," media analyst Jeff Kagan said. "(The Cubs) brand is recognized around the country, and now they're viewed as winners."

Photos from the 2016 Cubs Convention at the Sheraton Grand Chicago.

But Kenney realizes that grossing millions of dollars that can bankroll the player payroll easily doesn't guarantee a new contract will be a success. Because of distribution issues, less than 40 percent of the Southern California audience has TV access to Dodgers games.

On a smaller level, the Mountain West Network, or "The Mtn.," as it was called, ceased broadcasting after six seasons because of numerous issues, including the lack of availability on Dish Network and the college conference's losing Utah, Brigham Young and Texas Christian. Those schools' defections affected the Salt Lake City and Dallas-Fort Worth markets.

And the Pacific-12 Network hasn't reached a deal with DirecTV to carry its football games for the last four seasons.

There are also start-up costs and hiring the right talent in all departments. The Diamondbacks considered starting their own network but elected to stick with Fox Arizona because of their trust in the production developed in previous seasons.

Kenney acknowledged that the Cubs are continuing to negotiate with Comcast SportsNet Chicago, in which they hold a 20 percent ownership stake. Two years ago, the Phillies and their local Comcast affiliate agreed to a 25-year, $2.5 billion contract.

"(But) as we have conversations, which are on-going with all sorts of partners, if somebody offers us something dramatically better, we'll of course look at it," Kenney said. "But what we control is the idea of launching our own network in 2019."

Kagan emphasized the importance of hiring the right people never has been greater in this era of innovation and technology, especially with viewers finding ways to shave their cable bills and opt for other viewing means, such as wireless television.

Photos of the ongoing renovations at historic Wrigley Field.

But the biggest decision, should the Cubs choose their own network, is selecting the right business partner. The YES Network has achieved success through the 80 percent ownership backing of 21st Century Fox. The Dodgers' 25-year, $8.35 billion contract is considered an anomaly because Time Warner has absorbed all the financial risks.

"All these deals you read about, whether it's St. Louis or Seattle with big equity pieces, they're running the risk of cord cutting or cord shaving no different than we are at Comcast SportsNet," Kenney said. "I sit on the board. We worry about it every quarter."

In addition, there are distribution fees that must reach a comfort level with the team, cable companies and viewers.

The Cubs don't have the historical success of the Yankees, whose channel produces shows such as "Yankee Classics" and "Yankeography" thanks to the 53 Hall of Fame players, managers and executives who have helped produce a major-league record 27 World Series championships.

The YES Network also televises games involving the NBA's Nets to fill its programming in the winter. The Cubs may look to find other means of programming should they elect to start their own channel but may need more help.

The increasingly popular Blackhawks have a marketing partnership with the White Sox and a 20 percent stake in CSN. Bulls and Sox Chairman Jerry Reinsdorf controls 40 percent and CSN owns the remaining 20 percent.

And the quality of shows must satisfy the audience's needs. Time Warner cut three programs, including Dodger Clubhouse, last fall.

Kenney said the Cubs would need a two-year setup before televising games in 2020 if they choose to operate their own channel. But they won't be rushed into making a deal soon.

"Everything is an option," said Kenney, who recalled that CBS emerged as a dark horse to seize the Cubs' radio rights before the 2015 season.

"Maybe aside from changing (baseball) leadership, this is the biggest decision we'll have," Ricketts said. "So we have to get it right."

A version of this article appeared in print on January 25, 2016, in the Sports section of the Chicago Tribune with the headline "Own TV network in Cubs' future? - Team's business brass eyes possible launch of channel in 2020" —
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